President's plan would reduce federal deficit in a decade, but would not balance budget, non-partisan agency says.

President Donald Trump's proposed budget plan for the 2018 fiscal year would reduce the U.S. deficit by one-third over the next 10 years if approved, the non-partisan Congressional Budget Office (CBO) said Thursday.

"The cumulative deficit from 2018 through 2027 would be reduced by $3.3 trillion from the $10.1 trillion in CBO’s baseline," the report said.

Under Trump's proposal, the federal deficit would be slightly higher in 2018 and about the same in 2019 but smaller each year between 2020 and 2027, according to the CBO.

In fiscal 2016, the deficit was $585 billion, while the CBO expects it to grow to $693 billion for the 2017 fiscal year.

However, the CBO said it would not balance the budget.

Trump's $4.1 trillion budget, sent to Congress in May, proposed to balance the budget by 2027.

The CBO's report, on the other hand, estimates the budget deficit totaling $720 billion in 2027.

Trump's budget proposal, “A New Foundation for American Greatness", aims to increase military spending 10 percent and to spend $2.6 billion on border security.

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